Qatar to Pay Cash for 2022 World Cup Infrastructure

Qatar will foot, with cash, the US $70 billion price tag for infrastructure needed to host the 2022 World Cup, according to the head of the International Bank of Qatar (IBQ).

IBQ Managing Director George Nasra says that oil and gas projects in Qatar are likely to produce a $130 billion budget surplus in the next five years, ensuring that World Cup infrastructure will not negatively affect the Gulf state's cash-flow.

"All government-sponsored projects will be cash funded," Nasra said.

Qatar plans to build the infrastructure in phases. Work on a national rail system and metro lines in the capital Doha is scheduled to start in 2015. Also slated is the further development of the airport, a deep water port and a causeway connecting Qatar with Bahrain. Qatar will also build 12 air-conditioned stadiums to compensate for scorching summer temperatures.

Estimates for the cost of the infrastructure vary. Rating agency Standard and Poor's (S&P) estimated a relatively low total cost of $63 billion or 47 percent of Qatar's 2010 gross domestic product (GDP).

"We expect most of the infrastructure will be financed via revenues from the oil and gas sectors," S&P credit analyst Luc Marchand said in a report in December.

"In our opinion, this could lead to a lower, although still substantial, surplus in the government's budget at above seven percent of GDP in 2011-2013," Marchand said.

Development of the World Cup infrastructure is likely to boost the private sector with the requirement to increase the country's currently available 12,000 hotel rooms to 90,000 in 2022 and the $5.5 billion cost of building housing and schools for expatriates expected to flock in to support the projects.

Human rights and labour activists are gearing up to use Qatar’s hosting of the 2022 World Cup as a way to pressure Gulf state to improve abominable working conditions of its large-number of unskilled or lowly skilled expatriate workforce.

James M. Dorsey authors The Turbulent World of Middle East Soccer blog